DCIT 23(3), MUMBAI V. SONASHA ENTERPRISES, MUMBAI

ITA 5292/MUM/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62478 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 12-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B JAYA KUMAR
• Assessee Lawyers: P M PARIKH
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E , MUMBAI BEFORE SHRI G.E. VEERABHADRAPPA, HON'BLE PRESIDENT AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NO.5292/MUM/2011 ASSESSMENT YEAR: 2009-2010 DCIT 23(3), MUMBAI-51 SONASHA ENTERPRISES, 101, MARATHON HOUSE, DEVIDAYAL RD, MUMBAI-400 080 PAN NO.ABBFS 7104 H APPELLANT VS. RESPONDENT APPELLANT BY : MR. B. JAYA KUMAR RESPONDENT BY : MR. P.M. PARIKH DATE OF HEARING : 28 TH MAY 2012 DATE OF PRONOUNCEMENT : 8 TH JUNE, 2012 O R D E R PER AMIT SHUKLA (J.M.) : THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER DATED 9-5-2011, PASSED BY THE CIT(A) -33, MUMBAI FOR THE QUANTUM OF ASSESSMENT PASSED UNDER SECTION 143( 3) FOR THE ASSESSMENT YEAR 2009-2010 ON THE FOLLOWING GROUNDS OF APPEAL :- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN ALLOWING THE CLAIM OF DEDUCTION U/S 80IB (10) OF THE I.T. ACT, 1961. MADE BY THE ASSESSEE EVEN THOUGH THE ASSESSING OFFICER REJECTED THE CLAIM OF SUCH DEDUCTION ON THE GROUNDS :- I. THAT THE BUILDUP AREA OF THE 68 SHOPS INCLUDED IN THE HOUSING PROJECT OF TENEMENTS EXCEEDED 5% OF THE ITA NO : 5292/MUM/2011 2 AGGREGATE BUILT-UP AREA OF THE HOUSING PROJECT, THERE BY CONTRAVENING THE PROVISION OF SEC. 80IB (10) (D) OF THE ACT. II. THAT THE ASSESSEE WAS A CONTRACTOR AND NOT A BUILDER AND III. THAT THE ASSESSEE HAS SOLD TDR AND THE SAME BEING MOVABLE ASSET, THE PROVISIONS OF SEC 80IB (10) OF THE ACT DID NOT APPLY BEING APPLICABLE TO THE HOUSING PROJECTS ONLY. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN APPRECIATING THAT THE ASSESSEE HAS NOT JUSTIFIED AND SUBSTANTIATED THE PAYMENT TO THE ABOVE PERSONS WITH ANY DOCUMENTARY EVIDENCE. 2. AT THE OUTSET, BOTH THE PARTIES FAIRLY AGREED THAT THIS ISSUE IS COVERED AGAINST THE DEPARTMENT BY THE DECISION OF ITAT PASSED IN ITA NO.4911 & 4912/MUM/2010, VIDE ORDER DATED 31-10-2011 IN ASSESSEES OWN CASE. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS AND THE ORDER PASSED BY THE CIT (A), ASSESSMENT ORDER AND THE ORDER OF THE TRIBUNAL FOR THE EARLIER YEARS. WE FOUND THAT THIS ISSUE STANDS SQUARELY COVERED BY THE DECISION OF TRIBUNAL WHEREIN AFTER RELYING UPON THE DECISION OF JURI SDICTIONAL HIGH COURT IN THE CASE OF CIT VS. BRAHMA ASSOCIAT ES, REPORTED IN 333 ITR 289 , THE TRIBUNAL DECIDED THE ISSUE IN FAV OUR OF THE ASSESSEE AND AGAINST THE DEPARTMENT IN THE FOLLOWING MANNER :- 5 WE HAVE CONSIDERED THE RIVAL CONTENTION AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE FIRST OBJECTION RAISED BY THE LD DR THAT THE SRA SCHEME WAS NOT NOTIFIED BY CBDT, IT HAS TO BE SEEN THAT THIS OBJECTION HAS NOT BEEN RAISED BY THE ASSESSING OFFICER EITHER WHILE PASSING THE ASSESSMENT ORDER OR DURING THE REMAND REPORT. FURTHER, WE NOTE THAT THE ASSESSEE NEVER SOUGHT ANY RELAXATION IN THE CONDITIONS UNDER CLAUSE (A) OR (B) OF SEC. ITA NO : 5292/MUM/2011 3 80IB(10) BY VIRTUE OF FIRST PROV ISO THEREFORE, WHEN THE ASSESSEE HAS NOT CLAIMED ANY BENEFIT UNDER THE PROVISO, THE QUESTION OF THE SCHEME OF SRA, AS NOTIFIED OR NOT, DOES NOT ARISE. ACCORDINGLY, WE DO NOT FIND ANY MERIT IN THE OBJECTION RAISED BY THE LD DR. 5.1 AS REGARDS THE OBJECTI ON REGARDING THE COMMERCIAL ESTABLISHMENT IS CONCERNED, AS PER REMAND REPORT, THE ASSESSING OFFICER HAS ACCEPTED THE FACT THAT THE PROJECT WAS APPROVED VIDE AGREEMENT DT 11.5.2004; THEREF ORE, THE PRE-AMENDMENT OF PROVISION OF SEC. 80IB(10) ARE APPLICABLE. ACCORDINGLY, IN VIEW OF THE DECISION OF THE JURISDICTIONAL HIGH IN THE CASE OF BRAHMA ASSOCIATES (SUPRA), THERE IS NO BAR OF COMMERCIAL ESTABLISHMENT IN THE HOUSING PROJECT FOR AVA ILING DEDUCTION U/S 80IB(10) PRIOR TO THE INSERTION OF CLAUSE (D) W.R.F 1.4.2005. THE HONBLE HIGH COURT IN PARA 33 HAS OBSERVED AS UNDER: IN THE ABSENCE OF ANY PROVISIONS UNDER THE INCOME-TAX ACT, THE TRIBUNAL WAS NOT JUSTIFIED IN HOLDING THAT UP TO MARCH 31, 2005 DEDUCTION UNDER SECTION 80-IB( 10) WOULD BE ALLOWABLE TO PROJECTS APPROVED BY THE LOCAL AUTHORITY HAVING RESIDENTIAL BUILDING WITH COMMERCIAL USER UP TO 10 PER CENT. OF THE TOTAL BUILT-UP AREA OF THE PLOT. THEREFORE, WHEN THE PROJECT WA S APPROVED PRIOR TO 1.4.2005 THEN, THERE IS NO BAR FOR ALLOWING DEDUCTION U/S 80IB ONCE THE RESIDENTIAL PROJECT HAS BEEN APPROVED BY THE LOCAL AUTHORITIES. 5.2 AS REGARD THE LAST CONTENTION OF THE REVENUE IS THAT THE ASSESSEE IS NOT A BUILDER AND THE INCOME RECEIVED BY SALE OF TDR AND NOT BY SALE OF HOUSING PROJECT IS CONCERNED, WE FIND THAT THERE IS NO DISPUTE ABOUT THE FACT THAT THE ASSESSEE RECEIVED THE TDR AS A CONSIDERATION AGAINST THE DEVELOPMENT OF THE PROJECT IN QUESTION. WE FURTHER NOTE THAT THE TDR WAS RECEIVED ONLY FOR RESIDENTIAL PORTION OF TH E HOUSING PROJECT AND NOT FOR THE COMMERCIAL ESTABLISHMENT. THUS, WHEN THE TDR RECEIVED BY THE ASSESSEE WAS IMMEDIATELY SOLD AND THE SALE CONSIDERATION WAS SHOWN AS RECEIPT FROM THE HOUSING PROJECT, THEN, THERE IS NO OTHER ITA NO : 5292/MUM/2011 4 ELEMENT IN THE SAID RECEIPT AGAINST THE SALE OF TDR OTHER THAN THE INCOME FROM HOUSING PROJECT. 5.3 IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE SOLD THE TDR AFTER APPRECIATION OF THE VALUE AND THEREFORE, THE ENTIRE AMOUNT CANNOT BE TREATED AS SALE CONSIDERATION OF THE HOUSING PROJECT. THE ASSESSEE HAS GIVEN THE DETAILS OF THE RECEIPTS OF TDR AND SALE OF THE TDR AS IN THE SAME YEAR AND IMMEDIATELY AFTER RECEIVING FROM THE MMDRA. THEREFORE, THERE IS NO ELEMENT OF ANY APPRECIATION IN THE VALUE IN THE SALE CONSIDERATION. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LD CIT(A) FOR BOTH THE AYS. 6 IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE DISMISSED. 3 . THUS, RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF THE ITAT FOR THE EARLIER YEARS IN THE CASE OF THE ASSESSEE, WE FIND NO MERIT IN THE GROUNDS RAISED BY THE DEPARTM ENT. HENCE, THE GROUNDS TAKEN BY THE REVENUE ARE DISMISSED. 4. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED ON THIS 8 TH DAY OF JUNE, 2012. SD/- SD/- (G.E. VEERABHADRAPPA) ( AMIT SHUKLA ) PRESIDENT JUDICIAL MEMBER MUMBAI, DT: 8 TH JUNE, 2012 COPY FORWARDED TO : 1. THE APPELLANT, 2. THE RESPONDENT, 3. THE C.I.T. 4. CIT (A) 5. THE DR, B - BENCH, ITAT, MUMBAI ITA NO : 5292/MUM/2011 5 //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI PKM